Mexico’s Senate Passes Changes to U.S., Canada Trade Deal

Eric Martin
Mexico’s Senate Passes Changes to U.S., Canada Trade Deal

(Bloomberg) -- Mexico’s Senate passed changes to a new Nafta replacement free-trade deal with the U.S. and Canada after the governments of the three nations completed months of negotiations.

The Senate voted 107 to 1 to approve the changes. It only needed to debate the latest adjustments, because the original agreement was ratified 114 to 4 in June, with broad support from President Andres Manuel Lopez Obrador’s Morena party and the next two biggest blocs.

The move makes Mexico the first country to approve the revised deal with stronger labor protections announced on Tuesday by U.S. House Speaker Nancy Pelosi and backed by the largest American labor federation. Pelosi said she hopes for a vote before Congress recesses Dec. 20. Majority Leader Mitch McConnell said the Senate will vote after President Donald Trump’s impeachment trial, sometime in early 2020. Canada’s parliament is poised to take it up sometime next year.

“In Mexico, we have already complied: the Executive signed and the Senate ratified the USMCA,” Lopez Obrador said in a Twitter post and video from his seat on a commercial flight returning from a day trip to the northern state of Sonora. “Now it’s up to the congresses of the United States and Canada to do the same. It’s good news.”

On the back of the positive USMCA news this week and President Donald Trump signing off on a phase-one trade deal with China, the peso has strengthened 1.4% and briefly climbed to stronger than 19 per dollar, the best level since the end of July.

U.S. House Democrats this week embraced the U.S.-Mexico-Canada trade agreement after securing key revisions and signaled they could vote on the deal next week, putting Trump closer to a political win as he heads into the 2020 election.

Read more: New Nafta Leaves Winners and Losers Across North America

Pelosi praised the changes her House Democrats were able to negotiate, saying the revised deal is better for American workers. She said the new version of the accord, known as the USMCA, will be a model for other trade agreements going forward.

Trump welcomed the finalized overhaul of the North American Free Trade Agreement, which has been languishing for more than a year and could resolve some of the uncertainty weighing on the economy as he heads into his re-election campaign. But it is also a win for House Democrats who are eager to prove that they can do more than investigate and impeach Trump.

Representatives from Canada, Mexico and the Trump administration met in Mexico City on Tuesday and signed the amendments to the trade agreement.

(Adds comment from Lopez Obrador in fourth pargraph)

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